More Current Issues

1
More Current Issues

• Derek Newton
• CIGI Seminar 17 May 2005

2
More Current Issues Agenda

• A word from our sponsors
• Some other recent current issues
• What could/should we do in the future?

3
More Current Issues what is the Committee
supposed to do?

• Monitor current developments in general insurance
• Monitor external issues (including the work of
  other committees) that might impact upon general
  insurance business/actuaries
• Report to/advise GI Board
• Formulate appropriate representations to external
  bodies
• Monitor the activities of other Practice Boards
• Support the GIRO and ECPD Committees
• Produce regular newsletter for members re current
  issues
• Liaise with other GI Committees (especially GI
  ARIC)

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More Current Issues who is on the Committee?

• Derek Newton (Chairman)
• Peter Stirling (Secretary)
• Kate Angell
• David Costello
• Wendy Hawes
• Sheree Howard
• Tony Jordan
• Armoghan Mohammed
• Ruth Stephens
• Gerry Sweeney
• and
• Laurence Townley

• 4 consultants
• 2 reinsurers
• 2 Irishmen
• 3 company actuaries
• 1 regulator
• 1 Institute/Faculty person

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More Current Issues recent index

• Government and regulatory issues
• Solvency II
• International news
• Asbestos angle
• Compensation corner
• Other claims/legal issues
• Periodical payments and the Courts Act 2003
• Other news

6
More Current Issues at the Chairmans request

• Internet revolution
• APH what next?
• Can we stop the cycle"?
• Solvent schemes
• Treating Customers Fairly what does this mean
  for actuaries?

7
More Current Issues Government and regulatory
issues

• OFT and DWP liability reviews
• Insolvency Directive
• EU Physical Agents (Vibration) Directive
• Single European reinsurance market
• Gender discrimination

8
More Current Issues Solvency II

• Dr Müllers Casebook
• Solvency II
• Protect policyholders
• Comparable and transparent
• Match risks
• Simple
• Up to date
• Consistent with IASB
• Avoid extra capital costs

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More Current Issues Solvency II
Pillar I Target capital Safeguard capital
Pillar II Risk mgnt (rules) Regy
review (Co. specific)
Pillar III Encourage market discipline Account
ing disclosure (fair value) Policy-holder
disclosure

• Phase 1
• KPMG Report
• Sharma Report
• EU Report 2003
• Overall solvency
• Three-pillar approach useful
• Incentive to manage risks

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More Current Issues Solvency II

• Phase 2

Groupe Consultatif
IAA
GI Solvency II team
Accounting
Life Solvency II team
IT
Annette Olsens group
CEIOPS
UK actuarial profession
Legal
IFRS/ IAS
Comité Européen des Assurances
IAIS
Other European actuarial professions
ABI
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More Current Issues Solvency II issues

• Technical Pillar 1 issues
• Definition of Technical Provisions
• Prudence in outstanding provisions
• Discount rate
• Equalisation reserves
• Target capital
• risk measure
• time horizon
• confidence interval
• Operational risk
• Correlation

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More Current Issues Solvency II recent papers

• CEIOPS
• First wave (June 2005)
• MCR, SCR SCR MCR buffer?
• Not prescriptive about internal models
• Second wave (October 2005)
• Third wave (February 2006)
• IAIS
• Cornerstones paper (February 2005)
• 8 cornerstones
• Prudent, risk sensitive, explicit, range of
  control levels, use of standard more
  personalised approaches

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More Current Issues Solvency II recent papers

• Groupe Consultatif
• Glossary
• EC
• Started drafting directive
• Possible amendment to framework to consultation
• Thinking behind Solvency II, including
• SCR 0.5 probability of ruin
• Provisions at best estimate plus risk margin
  with 75 confidence
• Outline of framework directive
• Lamfalussy
• 2010?

14
More Current Issues Compensation Corner

• Man attacked by Dyson
• Woolf attacked by Dyson
• Conker trees and lime trees
• Candles
• Tobacco

15
More Current Issues claims/legal rulings (and
other news)

• Exxon Valdez
• removal of debris/LMX spiral
• WTC, Enron, WorldCom and laddering
• Hurricanes, earthquakes and tsunami
• NHS recoveries
• The next latent claim
• Glaucoma from PC use
• Deafness from iPods

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More Current Issues what could/should we do in
the future?

• Main product currently the Current Issues
  Newsletter
• Does it meet anyones needs?
• How should it be enhanced?
• What else should we be covering?
• what has the greatest impact on the market, on
  consumers, or on us as general insurance
  actuaries?
• on what do we have something to contribute ?
• How best to identify issues as (or even before)
  they appear over the horizon?
• How best to review/deal with these issues?

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More Current Issues

• Derek Newton
• CIGI Seminar 17 May 2005